In the U.K. the rule is you accumulate holiday but all employees MUST take all their holiday before the end of the financial year. Employers must give at least 5.6 weeks of holiday to each employee, however can give more (either as a fixed amount or unlimited amount). There are some rules that let you roll holiday over to the following year in some circumstances to allow a little flexibility, but in general the rule is you have to take them.
Legally employers must ensure that all employees take all of their 5.6 weeks of holiday, so it’s not a “use it or lose it” situation. Employers also cannot pay their staff more to have them work during their holiday, it’s got to be time off (up to 5.6 weeks, any holiday over that point is discretionary).
Because of this, all employers will pressure employees to take their holiday ASAP because if everyone postpones it you will have everyone off in the last few weeks of the financial year.
In practice the actual baseline offered in many jobs seems to be five weeks, plus bank holidays.
Employers can dictate exactly when you take all of your holiday allowance by law, it’s just that this doesn’t happen in reality. Similarly they can force you to work bank holidays.
Most companies that I’ve worked at which had this type of vacation policy had a directive for managers to ensure that every employee took at least 3-5 weeks of vacation every year (the minimum varied with company). It wasn’t always successful but that was the objective. More than that was fine too.
One of the original motivations behind these policies was the burst-y nature of some types of engineering work. Companies wanted to allow engineers to take 2-3 months of paid vacation after a relatively intense 12-18 months with few breaks working to ship some product. Giving people multiple months of vacation is surprisingly difficult without also running afoul of other legal and accounting complexities around vacation time in various jurisdictions. The “unlimited / discretionary” policy is essentially a loophole in US law that originally allowed managers to reward people with large amounts of time off. It has been generalized, and has other accounting benefits, but this was the original use case.